18 Disadvantages Of Black Money

1. It encourages people to be dishonest, perhaps even create a rise in the number of criminals. 2. Loss of Revenue to the Government. 3. It diverts the scarce resources into non-priority areas. 4. Many time Vat dept & income tax dept raids their showroom, stores & houses further reducing the profit margin. 5. There will be a drastic drop in the quality of what is offered in terms of goods & services. 6. Undermining the Equity. 7. It leads to the wrong measurement of the size of the economy and thereby misleading the level of economic activity.  8. They sell goods without invoice, so there is always a risk from their customer side not to make payment. 9. This will subsequently mean a higher tax will have to be imposed. 10. Lavish Consumption Spending. 11. It also erodes confidence in the government if the tax evasion is massive.